The S&P 500 rallied 0.81% and the Dow was higher by 0.65%. The rally was across the board as stocks posted their biggest gains since August 22. The S&P 500 has been up each trading day here in September and four of the past five days. The move this week leaves the index 3.3% off the high hit earlier this year. Very strong August auto sales data and positive management comments at a technology conference set the tone for a positive day.
Comments from the Citigroup Technology conference were broadly viewed as positive. Several companies in the semiconductor industry gave strong guidance for the remainder of the year. The Semiconductor index gained 2.6% today. At worst, several management teams reiterated guidance after their most recent conference call while many companies reported improved spending trends from customers. Technology tends to outperform in the fourth quarter. The conference today increased investor confidence that the trend will continue this year. Networking stocks were also strong after Ciena spiked close to 14% on strong earnings and better than expected guidance.
The transports group moved higher by 1.25%, with rails and airlines being the leaders in the space. Rail names that have exposure to the domestic energy markets stood out. Far greater than expected shipments of crude in the U.S. continue to help the railroads. There were reports in the Wall Street Journal today that oil refineries increasingly doubt that the Keystone pipeline will be approved, and that refiners don’t care because the rails are carrying high amounts of crude down from Canada. Delta Airlines gained better than 2% after reporting strong revenues per available seat data.
CBS continued to gain after news regarding its settled dispute with Fox came out. It appears that CBS is going to get close to $2 per subscriber. Time Warner and Viacom were leaders in the media networks group. Advertising agencies gained on the strong sales reported from auto companies. The strong sales point to an increase in spending from automakers for the rest of the year.
Consumer discretionary outperformed staples. Retailers were particularly strong. The discount dollar stores were up sharply again today. Mid-priced fashion retailers were also in favor. A hedge fund announced they had recently taken a substantial stake in JC Penney and the stock moved higher by 6%.
Source: PFS Group
